The Start Network, an amalgam of 42 national and international aid agencies, reported on July 11, 2017, that it is researching blockchain-based models for delivering humanitarian aid with fund management and distribution platform Disberse.
Among the project's goals are to increase the rapidity of aid distribution and to infallibly trace transactions from donor to recipient. Ultimately, the blockchain technology would act as a monitoring system to ensure those in need receive the funds in question while simultaneously mitigating exchange rate-based losses.
In the current banking systems, high fees and transaction longevity present inefficiencies that can be costly to both the organizations providing aid and the individuals who need it. These issues are complicated by volatile exchange rates in countries wherein economic infrastructure is severely lacking, which is often the case in places marred by humanitarian crises.
Disberse combats the loss in exchange rates and intermediary fees. It completed a pilot program with UK-based charity Positive Women by which it reduced losses at delivery points for a Swaziland aid project to a null. Funds were tracked as they traveled from the UK to four Swazi schools by way of a non-governmental organization; the project's savings were enough to pay the annual fees for an additional three students.
Sarah Llewellyn, director of Positive Women, spoke of the benefits revealed by the pilot program:
“We normally use our bank to transfer funds, but transfers have become increasingly expensive and slow. Using Disberse, we saved 2.5 per cent [on forex fees], which covered the costs of a year’s education for an additional three girls. We could also see our funds being distributed to partners and schools, enabling us to spend less time monitoring, and more time demonstrating impact to our donors.”
The Start Network plans to scale up the Disberse platform to meet a greater demand by testing the system over six months with a series of small disbursements.
Sean Lowrie, Director of the Start Network, explained how the project may initiate a new manner of operation in the aid industry.
“This exciting partnership could lead to the transformation needed in the way money flows through the humanitarian system. The Start Network is testing innovative solutions to many humanitarian challenges to enable aid agencies to be more efficient and effective. This new project could catalyse a new way of working, one that is transparent, fast and which drives accountability to taxpayers and those affected by crises.”
Disperse, notably a member of ConsenSys’ Blockchain for Social Impact Coalition, was born from an ambition to preserve and improve the impact of aid finance, according to its CEO and Co-founder, Ben Joakim. "We believe in the purpose of aid, but recognise it is constrained by inefficiencies," he said. "Using blockchain technology, we digitise and distribute donor funds through the chain to recipient beneficiaries. These transactions are transparent, and can be viewed online, ensuring funds are distributed and delivered as intended.”
If properly utilized, blockchain technology has the capacity to diminish the corruption present in the aid industry by presenting an immutable record of transactions from donor to recipient. The work endeavored upon by the Start Network and Disperse stand to make that possible future a reality.